Chattels include movable personal possessions that may range from executive jets to collections of teaspoons, and much more besides. Our executor may refuse to list all of them in our will, even though our heirs may squabble over the details. Giving our chattels to executors may simplify matters after we depart, but there are things we need to know.
Letter of Wishes Versus Gifting Chattels
A letter of wishes may help our executor to share our movable possessions among our heirs. However this does not take precedence over our wills, and how our heirs seek to interpret them. Keeping the list up to date is also not easy, given other priorities demanding attention.
For these various reasons, the UK Law Society discusses giving our chattels to executors instead. This alternative strategy should work this way, in principle at least:
- We give all our personal chattels to our executor in our will, or any supplementary codicil.
- We direct our executor to dispose of these personal possessions, according to the clues we leave behind.
- These suggestions may include, but are not limited to written notes, or remarks we made when alive.
This strategy becomes part of our will (unlike a letter of wishes). It could therefore be a simple, watertight way of ensuring our intentions materialize after we die.
Who Should Get This Car (Image © Avery Associates)
Effect of Giving Chattels to Executors
Our letter of wishes is an informal statement that is not legally binding on our executor. The person clearing our home may overlook the document for whatever reason. Giving our chattels to our executor is an official statement. It becomes public during the reading of our will that interested parties may attend.
In case you are wondering whether the executor inherits the chattels, Section 143 of the Inheritance Tax Act 1984 confirms that executors should act as intermediaries:
“Where a testator expresses a wish that property bequeathed by his will should be transferred by the legatee to other persons, and the legatee transfers any of the property in accordance with that wish within the period of two years after the death of the testator, this Act shall have effect as if the property transferred had been bequeathed by the will to the transferee.”
However, this small print raises another interesting question. What happens if the executor fails to meet the two-year deadline, to pass the chattels on to the heirs?
What if Executors Fail to Perform?
This should not normally be the case, because the law may come down hard on misbehaving executors. However, that said, a 1954 British Court did rule that giving our chattels to executors is an outright act, not an interim measure.
Court Decisions Are Binding (Image © Avery Associates)
A British executor will almost always follow the instruction in a will, a letter of intentions, or the wording of an outright gift to them. However, they obviously cannot do so, if they cannot locate a particular chattel, or identify the person who should inherit it.
When Intentions Do Not Mention Chattels
The 1954 Court decision we referred to earlier, confirms that a gift to an executor is a beneficial one. This implies that if they pass a chattel on to another person, then they are personally gifting them for inheritance tax purposes.
However, inheritance tax will not apply, the Law Society continues, to chattels gifted to the executor, and retained by them because they are not listed among the deceased person’s intentions.
This opens the door to another fascinating question … what happens if an unlisted chattel is valuable? And what would the situation be, if there were no intentions, or the intentions did not materialize?
Who Pays the Inheritance Tax (Image © Avery Associates)
Giving Valuable Chattels to Executors
If no direction for a valuable chattel surfaces, then the gift is absolute to the executor. Their first step might be to solicit the opinions of those close to the deceased.
If this line of inquiry fails to provide a solution, then the executor might disclaim the gift, and return the valuable chattel to the estate. However, this would not be mandatory, and they could retain it as un-allocated residue.
Giving Our Chattels Wisely to Executors
Giving our chattels to executors to distribute on our behalf, may not be a simple matter. However, in our layperson’s opinion, complications could be avoided if the relevant clause in our will covers the situations we mentioned.
Choosing the right executor in England is not always easy. We work with the best in class in London and outlying areas, advising them on property and chattel value, and assisting with inheritance tax submissions.
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